Israel’s Tech Sector Faces Growing Talent Exodus Abroad

Israel’s technology sector is witnessing a growing wave of employee relocation abroad, driven by the prolonged impact of the war in Gaza, according to a report published on Sunday.

The Israel Advanced Technology Industries (IATI) said that requests by Israeli employees at multinational companies to transfer overseas rose sharply during 2025, warning that the trend could gradually undermine the country’s innovation engine and its global standing as a technology hub.

According to the report, 53% of technology companies surveyed reported an increase in employee requests to relocate abroad. “This is a trend that could, over time, harm local innovation and Israel’s technological position,” IATI said.

Israel’s technology sector is a cornerstone of the economy, accounting for roughly 20% of gross domestic product, 15% of total employment, and more than half of the country’s exports.

The country hosts hundreds of multinational technology companies, including Microsoft, Intel, Nvidia, Amazon, Meta, and Apple, many of which employ large Israeli workforces and operate major research and development centers.

The annual report also noted that some global companies are reassessing their investments in Israel and considering shifting operations to other countries.

“In certain cases, companies that faced supply chain disruptions during the war found alternatives outside Israel,” said Karin Mayer Rubinstein, CEO of IATI. “Once these alternatives proved efficient, there is a risk that some activities may not fully return.”

The report highlighted rising interest in long-term relocation among senior executives and families, with more employees applying for positions outside Israel.

Despite these challenges, IATI said global technology firms continue to view Israel’s tech ecosystem from a long-term perspective, noting that many companies managed to perform well even during the conflict.

According to the report, 57% of companies maintained stable business activity throughout the fighting, while 21% expanded their operations, signaling continued confidence in the local market despite uncertainty.

By contrast, 22% of companies reported damage to their business activity during the war, which began on October 7, 2023, and ended two months ago under a U.S.-brokered ceasefire agreement.